This article was downloaded by: [Vrije Universiteit, Library] On: 22 February 2010 Access details: Access Details: [subscription number 907218003] Publisher Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37- 41 Mortimer Street, London W1T 3JH, UK History and Technology Publication details, including instructions for authors and subscription information: http://www.informaworld.com/smpp/title~content=t713643058 STRUCTURAL WAYS TO EMBED A RESEARCH LABORATORY INTO THE COMPANY: A COMPARISON BETWEEN PHILIPS AND GENERAL ELECTRIC 1900-1940 F. Kees Boersma a a Department of Culture, Organization and Management, Vrije Universiteit Amsterdam, The Netherlands. To cite this Article Boersma, F. Kees(2003) 'STRUCTURAL WAYS TO EMBED A RESEARCH LABORATORY INTO THE COMPANY: A COMPARISON BETWEEN PHILIPS AND GENERAL ELECTRIC 1900-1940', History and Technology, 19: 2, 109 — 126 To link to this Article: DOI: 10.1080/07341510304137 URL: http://dx.doi.org/10.1080/07341510304137 PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf This article may be used for research, teaching and private study purposes. Any substantial or systematic reproduction, re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express or implied or make any representation that the contents will be complete or accurate or up to date. The accuracy of any instructions, formulae and drug doses should be independently verified with primary sources. The publisher shall not be liable for any loss, actions, claims, proceedings, demand or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or arising out of the use of this material. History and Technology, 2003 VOL. 19(2), pp. 109–126 STRUCTURAL WAYS TO EMBED A RESEARCH LABORATORY INTO THE COMPANY: A COMPARISON BETWEEN PHILIPS AND GENERAL ELECTRIC 1900–1940 F. KEES BOERSMA* Department of Culture, Organization and Management, Vrije Universiteit Amsterdam, The Netherlands This paper compares the Philips Research Department and the Research Laboratory of the American company General Electric (GE).1 It argues that it is, above all, the issue of the organization of industrial research, appropriate leadership and the embeddedness of a research department in the company as a whole that is important for an historical analysis of an industrial research department. The complex structures that Gilles Holst (the first Philips research director) and Willis Whitney (the GE research director during the first decades of the twentieth century) set up in their organizations enabled scientists to keep in touch with the resources provided by the universities, and made it possible for them to come up with articles, patents and devices for their respective companies. It enabled them also to strengthen their contacts inside and outside the laboratory’s walls. However, more than his colleague Whitney at GE, Holst at Philips intended to integrate the research laboratory into the company as a whole. Holst’s policy as a research director will be illustrated using the case of Philips’ radio research. A comparative discussion of industrial research in the 1930s within both companies shows that the “successful” integration of research activities is context- dependent. Keywords: History of industrial research; Organizational structure and culture; Science, technology and industry RESEARCH IN INDUSTRY Downloaded By: [Vrije Universiteit, Library] At: 09:51 22 February 2010 The process of invention changed at the turn of the century from being an activity performed by hobbyists and individual entrepreneurs into a systematically organized discipline.2 Thomas Hughes, in his analysis of the history of technology argues that: “The engineering departments, and later the industrial laboratories of these companies, with their far greater material and personnel resources, took over responsibility for the inventive activity . .”.3 This happened first at the end of the nineteenth century in the German chemical industry; in other countries such labs emerged somewhat later.4 In particular it was small dyestuff firms in Germany that used knowledge created in research laboratories. The electro-technical industry is the other sector in which laboratories were established. In the first decades of the twentieth century several industrial firms in America and Europe established in-house research departments and *E-mail: [email protected] ISSN 0734-1512 print/ISSN 1477-2620 online © 2003 Taylor & Francis Ltd DOI: 10.1080/0734151032000084868 110 F. K. BOERSMA consciously sought to provide themselves with sources of up-to-date knowledge that were necessary to enter new markets. According to Reich, who wrote about the history of General Electric’s (GE) Research Department, an industrial laboratory can be characterized as: “ . set apart from production facilities, staffed by people trained in science and advanced engineering who work toward deeper understandings of corporate-related science and technology, and who are organized and administered to keep them somewhat insulated from immediate demands yet responsive to long-term company needs.”5 The research departments and the companies’ research activities fit well in Alfred Chandler’s model of an integrated company with centralized management and a diversification policy.6 And although his focus was first of all on the managerial hierarchies that appeared in the United States, the decision of several European companies, like Siemens and Philips, to establish a research laboratory are in line with the historical features of big enterprises as described by Chandler.7 The question is, however, whether the Chandlerian organization structure and the R&D leadership was decisive in the relative success of industrial research departments, or if the technology that was developed at that time was just too important to ignore. The historian Bernard Carlson emphasizes, in line with Chandler’s approach, the indispensability of the corporation’s structure for diversification processes.8 Innovation is a social process, which means the social setting of the research organisation shapes technology, and vice versa. More specifically, it is not useful to just analyze the organizational dynamics and then follow the individual researchers’ or research director’s activities, but it is the mutual relationship that has to be explored. In line with this, Lou Galambos emphasizes that most in-house R&D departments were established in precisely those firms that had worked first to stabilize their internal organizational structures and that were characterized by a managerial hierarchy which coordinated a variety of operation units. After building a stable internal structure, the researchers working within these R&D settings were eager to keep in touch with the scientific community outside the companies’ walls.9 In other words, according to this body of literature, it is especially the issue of the organization of industrial research and the embeddedness of a research department in the company as a whole, which is important for an historical analysis of an industrial research department. This article analyzes the history of the Philips Research Laboratory, established in the Netherlands in 1914, and compares it with the Research Laboratory of the General Electric Company, established in America in 1900. GE’s Research Laboratory is often taken as an Downloaded By: [Vrije Universiteit, Library] At: 09:51 22 February 2010 example for “how to do research in industry.” Historians have referred more than once to GE as an international trendsetter.10 While the Philips Research Laboratory was growing, Gilles Holst, Philips’ first research leader, used the GE Research Laboratory as an example. In what follows, the actors’ motives, strategies, and first activities as well as the organizational structure of both labs will be investigated. Since the history of GE’s early research department is already known from literature, this paper will focus primarily on Philips, bringing in the comparison with GE to explore the thesis that embedding the research department within the company was the key to success. I will analyze how and why Philips decided to do research in an industrial context. What were the strategies within Philips and what were the backgrounds of employees in the company? And how were the research activities structured in the research organizations in the early years? I will make clear that economic and business circumstances had an influence on the organizational structure of Philips’ laboratory. Holst’s policy as a research director will be illustrated using Philips’ radio research. By demonstrating the dynamic interaction between Philips’ individual radio researchers, managers, and organizational structures, I will present the way in which the RESEARCH AT PHILIPS AND GE 111 Philips research laboratory was integrated into the company as a whole. It is at this point that I will bring the history of the GE Research Department into the discussion, not only to show that GE’s lab was an important model for Philips, but also to show that Holst and Whitney, as the research directors and key persons in the research institutes, molded their organizational structures in various ways. It will become clear that it is too easy to say that Holst blindly copied GE’s research